The Canadian dollar appreciated past 1.32 per USD in mid-June, its strongest in nine months, as weakness in the greenback coincided with a hawkish outlook for the Bank of Canada. In its last meeting, the domestic central bank surprised markets and raised its key interest rate by 25bps. The decision marked the resumption of the BoC’s tightening cycle after two consecutive holds, backtracking the Governing Council’s signal that rates had peaked to indicate that borrowing costs were not as restrictive as policymakers expected. The BoC is expected to continue raising interest rates in its July meeting and extend the effort on curbing stubbornly tight interest rates. On the other hand, signs of a softening labor market in the US drove currency markets to pare bets of a hawkish Federal Reserve.
The Canadian Dollar is expected to trade at 1.34 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.39 in 12 months time.
The Canadian Dollar is expected to trade at 1.34 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.39 in 12 months time.